Change manage­ment is dead, long live change manage­ment

Change manage­ment is a thing of the past. This is the thesis of Olaf Hinz, Hamburg-based consul­tant on orga­ni­sa­tional tran­si­tion. In his way of thin­king, disrup­tion, radical trans­for­ma­tion, and other major changes in a VUCA world – one that is vola­tile, uncer­tain, complex, and ambi­guous – simply cannot be controlled.

Olaf Hinz

Olaf Hinz trains and coaches management/ project mana­gers and supports compa­nies in orga­ni­sa­tional deve­lop­ment. Born in 1968, he lives in Schleswig-Holstein with his wife and three sons. After working as a project manager and HR manager for LB Kiel bank, he worked as Head of the Minister’s Office under former Mini­ster Peer Stein­brück. Since 2000, he works as a consul­tant beco­ming self-employed in 2004. He also lectures at the Leuphana Univer­sity in Lüne­burg and at the Stein­beis Univer­sity Berlin.

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“In manage­ment there was this idea that there was a secure way of fore­se­eing the envi­ron­ment where you can make plans, going there step-by-step,” says Hinz. “Change manage­ment plans have been around for the last 30 years star­ting with John Kotter and his eight steps. So there’s a lot of lite­ra­ture, but they all stand on the posi­tion that there is at least an 80- to 90-per cent secure envi­ron­ment where you can make plans, where plans are feasible. My thesis is that in the future we will be in or probably right now we are in what I call a VUCA world.”

Simply put, manage­ment metho­do­logy and the tools and methods that have been used over the last 20 years have not been suffi­ci­ently robust to meet the chal­lenges of today’s envi­ron­ment. “We have change but we have to have another way of dealing with it”, says Hinz.

Hinz first points to mana­ge­rial reper­toire of “taking the crowd” along the same path. “One of the funda­men­tals of change manage­ment is you must have a huge enga­ge­ment of all the people around, all the members of the orga­ni­sa­tion. And then most of the change cases fail because of the fact that the leader of the change manage­ment fails to take the crowd with them. They left the crowd behind or didn’t explain what was going on very well, so that the people did not under­stand.”

He points to the current case of Opel in its talks of a sale to French concern Peugeot. He says that the talks only included manage­ment at the very top, so the comp­laint was imme­dia­tely about the inte­gra­tion of the workers council.

“In clas­sical change manage­ment cases you have to tell the people about what’s going on. If you don’t tell them, there is going to be some resi­stance or worse. Even when there is no change manage­ment, the basic thing that you have to do is take the crowd with you. You have to inform your commu­nity.”

A central fault of change manage­ment theory is its method of plan­ning. He compares it to the planned economy that was the model under the former East Germany. “They tried to have a five-year plan, a three-year plan and so on to steer their economy. The idea was that a central intel­li­gence – a committee – would plan out how ever­ything should behave over the next five years. Change manage­ment from my point of view has the same mental model: that we are intel­li­gent enough to plan a proper change project and execute it. There­fore, we will guide you – the people, the workers’ council, the parti­ci­pants in the orga­ni­sa­tion – with the aid of this intel­li­gence.”

Hinz says that flexi­bi­lity is the main­stay today in the real world. Instead of setting plans with fixed targets, plans must resemble corri­dors with minimum and maximum targets, with the whole orga­ni­sa­tion oscil­la­ting between these mini­mums and maxi­mums.

Further­more, he empha­sises the concept of “good enough” plan­ning instead of waiting to perfect contra­dic­tion-free plans. Again he uses Opel as an example. “In the Opel example, the general manage­ment came in a very formal way with a habit of saying ‘We don’t want to commu­ni­cate some­thing with the possi­bi­lity that we can’t agree on a merger. It would make no sense to tell the world what we are talking about. Let’s wait till we have more facts’.” This was a good idea, but did not work, Hinz says. He points out that people within a company gene­rally have a gut feeling when change is underway. Management’s fear of sowing fear or resi­stance, and there­fore attemp­ting to hold on to infor­ma­tion – espe­ci­ally in the era of social media – is misplaced.

Hinz’s idea is to bring the company into the deci­sion-making process earlier, brin­ging people rough concepts that are “good enough” but not yet 100 per cent thought through. “Tell the orga­ni­sa­tion that there is some­thing going on. These are our first ideas. What do you think?” “The workers are adults. They will know in any case that some­thing is going on. Stop trea­ting them like children. But when manage­ment waits until ever­ything is ready, as in the case with Opel, this leads to mistrust, this leads to people feeling abused.” Another point in Hinz’s para­digm for change manage­ment is the use of diver­sity among teams. He says: “In the clas­sical change manage­ment model there was the idea that if you have diffe­rences in your teams, espe­ci­ally diffe­rences on the topic of change manage­ment you have to smooth them over. Don’t talk about diffe­rences in the former change manage­ment. Talk about what they have in common.”

He compares this to a bus filled with people that is trying to make a turn on poten­tial hazar­dous land­s­cape but ever­yone on board is looking in the same direc­tion. His idea is that diverse members, teams, and even oppo­site points of view can be used like the indi­vi­duals with diffe­rent perspec­tives in the large turning bus, to nego­tiate the diffi­cult terrain. “Every type of person, and his or her diffe­rent compe­tences, diffe­rent view of the world, can say: ‘Hello! We have to do some­thing diffe­rent.’ Because you never know where the obsta­cles come from.”

Hinz even states that resi­stance within the company – with either workers not supporting the proposed change or out-and-out resi­sting it – can be used for overall benefit. “The older view of change manage­ment was that if there is resi­stance you have to deal with it so that the resi­stance is dimi­nished.”

He explains that resi­stance is the typical pheno­menon in change processes. “When there is a new direc­tion in a company or orga­ni­sa­tion, there will be people who say it makes no sense, or asking what the reason is for the change, or even asking ‘What’s in it for me.’” Hinz uses as an example his own father, who expresses pride that for his entire profes­sional career he never used a computer even for a single day.

Though resi­stance is typical, the focus of tradi­tional change manage­ment has been to deal with it by arguing over it or even attemp­ting to break the resi­stance. “When the old manage­ment world was focused on a new direc­tion and making a proper plan, if there were people stan­ding on the side­lines or even stan­ding in the way of the new process, efforts were made to push them out of the way.”

The new way of change manage­ment, Hinz says, is to look at resi­stance as a message from the workers to the company, and these messages can be used just as diver­sity can be used for the benefit of the company. “The people or part of the orga­ni­sa­tion who are resi­stant to the new idea, they are telling you some kind of orga­ni­sa­tional truth that you don’t have in mind, or that you haven’t had in your focus when you went in the new direc­tion.”

A lot of energy is needed for an indi­vi­dual or an orga­ni­sa­tion to begin a new direc­tion, Hinz points out, and the kind of energy used in resi­stance is nega­tive and non-produc­tive. “The idea of new change manage­ment in leadership is that you can seek a change in poles – to use an elec­trical analogy – chan­ging from nega­tive to posi­tive. It is not to be expected that you will have a pole change if you try to break resi­stance. You have to deal with it. And there are a lot of methods on how you can deal with it and not break it.”

All this – from flexible plan­ning corri­dors to inte­gra­ting resi­stance – can be summa­rised in what Hinz calls the 3 i’s, plan­ning that is itera­tive, incre­mental, and inter­ac­tive. Itera­tive plan­ning is opposed to the old mana­ge­rial world where you have a big picture plan or programme which had steps from one date to another date years in the future, with intri­cate details for the closest steps. This older model is not very agile, Hinz says. “Itera­tive doesn’t mean steps. It’s more of sprint for a short distance after which you make a new assess­ment of the situa­tion. Incre­mental plan­ning takes into consi­de­ra­tion that Rome was not built in a day. “This is step by step, but not the kind of step process which means that after 3 years, for example, we have a new buil­ding. In incre­mental plan­ning, we would build a proto­type of the buil­ding and then ask the people who want to live in it, if this is the buil­ding they want to have.” In orga­ni­sa­tional terms, this means buil­ding small concrete and obvious outcomes and processes, presen­ting them to the orga­ni­sa­tion say after five weeks, and saying: “This is our proto­type. What do you think of it?” Inter­ac­tive plan­ning comes back to the point of using diver­sity.

Being inter­ac­tive requires using a lot of infor­ma­tion on the outside world so you avoid group think and blind­s­pots. “In the new change manage­ment model, the way you act inter­ac­tively is with a maximum of diver­sity with a maximum of profes­sional input from all corners of the orga­ni­sa­tion. The idea is that we keep the diver­sity high to avoid blind­s­pots.”

Olaf Hinz

Olaf Hinz trains and coaches management/ project mana­gers and supports compa­nies in orga­ni­sa­tional deve­lop­ment. Born in 1968, he lives in Schleswig-Holstein with his wife and three sons. After working as a project manager and HR manager for LB Kiel bank, he worked as Head of the Minister’s Office under former Mini­ster Peer Stein­brück. Since 2000, he works as a consul­tant beco­ming self-employed in 2004. He also lectures at the Leuphana Univer­sity in Lüne­burg and at the Stein­beis Univer­sity Berlin.